Boeing announces 30,000 job cuts due to ongoing fallout from COVID-19 and MAX 8 grounding

The company wants to focus on rebuilding trust in the brand.
The company wants to focus on rebuilding trust in the brand. Photo credit: File.

Boeing is cutting 30,000 people from its workforce due to ongoing uncertainty around both the COVID-19 pandemic and the grounding of its 737 MAX 8 aircraft.

In a letter to all employees, Boeing President and CEO Dave Calhoun said the company anticipates a workforce of about 130,000 employees by the end of 2021, a reduction from the more than 160,000 strong workforce the company had in January this year.

"As we align to market realities, our business units and functions are carefully making staffing decisions to prioritise natural attrition and stability in order to limit the impact on our people and our company," Calhoun said.

"Our priorities remain the same - to strengthen our culture, improve transparency, instill operational excellence, rebuild trust, and ensure we always deliver the highest standard of safety and quality. By working together and focusing on these priorities, we will emerge as a stronger company that is competitively positioned to deliver on our commitments to customers and realise new opportunities."

"If it's not Boeing..."

Rebuilding trust will be one of the company's biggest challenges.  

For decades, the slogan 'If it's not Boeing, I'm not going' was widely used, fuelled by American pride and the company's market superiority. Boeing even sells the message on T-shirts, stickers and badges.

Boeing announces 30,000 job cuts due to ongoing fallout from COVID-19 and MAX 8 grounding
Photo credit: Boeing Store

But that patriotic chant from Boeing and the aviation industry itself has quietened to almost a whisper.

Hundreds of the company's Boeing 737 MAX 8 aircraft remain grounded. The Federal Aviation Administration (FAA) in the US ordered the aircraft out of service following two similar fatal crashes involving the new aircraft type within just months of each other.

In October, 2018, Lion Air Flight 610 crashed into the Java Sea just 13 minutes after taking off from Jakarta, Indonesia. All 189 people onboard died.

Then just months later in March, 2019, Ethiopian Airlines Flight 302 crashed approximately six minutes after takeoff from Addis Ababa in Ethiopia, killing all 149 passengers and 8 crew members onboard.

Delivering the company's quarterly results, Calhoun said Boeing had moved closer to having the MAX 8 aircraft cleared to fly again, but even when the FAA does give the green light to Boeing to recommence MAX 8 services, they will likely remain grounded, and orders for the aircraft will be on hold due to COVID-19.

The CEO also spoke of other revenue streams for the company.

"We delivered 37 aircraft to our defence customers and secured new services agreements for Boeing Converted Freighters and Australian P-8As. I am proud of the commitment and dedication you've demonstrated in delivering on these accomplishments and more for our customers during these challenging times," he told employees.  

Boeing's share price has dropped from US$351.09 in November 2019 to US$148.76 this week.